Economic Data Shifting Market Expectations Ahead of Friday’s BLS Report
April 01, 2015
Economic Data Released Today Is Shifting Market Expectations Ahead of Friday’s BLS Employment Report for March; the ADP Research Institute Suggests that Jobs Growth Slowed in March; the Markit PMI for March Suggests that Manufacturing Activity May Have Picked Up Despite Recent Federal Reserve Survey Data; the Markit PMI Moved Up to 55.7 To Beat Expectations and Outpace the Prior Reading of 55.1.
Economic Indicators & News
- Summary: A rush of economic data released today is shifting market expectations ahead of Friday’s BLS employment report for March. The Markit PMI and the ISM PMI for March are moving oppositely, offering conflicting pictures about current manufacturing conditions. The ADP employment report appears to affirm the more negative outlook of the ISM PMI and is likely to dampen expectations ahead of Friday.
- Ahead of Friday’s BLS Employment Report for March, the ADP Research Institute is suggesting that jobs growth slowed in March. Today’s ADP Employment Report indicates that 189,000 jobs were added in March, down from previous estimates of 214,000 jobs and 220,000 jobs for January and February of 2015. Reduced manufacturing activity appears to be contributing to the slowdown; manufacturing employment reportedly declined by 1,000 jobs, marking the first monthly decline in manufacturing employment since January 2014. Job creation across other sectors and industries remained relatively solid; 184,000 service providing jobs were added. In the past few months, the ADP jobs numbers have come in lower than BLS employment numbers; in February, the BLS report reflected far more robust jobs gains of 288,000 in comparison to the 214,000 jobs estimated by ADP. Thus, weakness in the ADP numbers may not translate into a slowdown in Friday’s upcoming report. Nevertheless, expectations for Friday’s market-moving employment report are likely to diminish slightly following upon the ADP jobs numbers. [ADP]
- The Markit PMI for March suggests that manufacturing activity may have picked up despite recent Federal Reserve survey data that have suggested reduced production over the month. The Markit PMI moved up to 55.7 to beat expectations and outpace the prior reading of 55.1. The PMI was boosted by increased output, new orders, and employment. Some strength in the Markit PMI may serve to counter-balance the apparent weakness in manufacturing employment growth suggested by today’s ADP report for March. [Markit Economics]
- The ISM PMI report for March released today indicated a drop in the index of 1.4% to 51.5%. The slip in the index reading from February suggests that manufacturing activity slowed significantly. Production held steady, but reduced new orders, employment, inventories, and prices weighed on the headline index. The weakness of the ISM PMI contrasts notably with the Markit PMI, but it appears to corroborate the weak manufacturing labor market suggested by the ADP employment report. [ISM]
- Construction data for February released by the Census Bureau today indicates that construction picked up with a 2.1% rise in total construction. However, the gains were almost exclusively a result of non-residential construction, which increased by 4.6% to offset a decline in residential construction of 1.9%. Both public and private construction posted improvements from the month of January, increasing by 3.1% and 1.8% respectively. [Census Bureau]
- Data released today for the month of February suggest that total motor vehicle sales dipped slightly, dropping 2.6% to an annualized rate of 16.2 million vehicles and failing to meet market expectations. The weakness in February motor vehicle sales was driven primarily by sales of North American made vehicles, which fell by 3.1% as foreign made vehicles also edged down by 0.2%. [Bloomberg]